10-Q: Mondelez Q1 2026 Earnings: Revenue Up, EPS Soars

Mondelez International reported a strong first quarter for 2026, with net revenues increasing by 8.2% and diluted EPS showing a significant jump of 41.9%.

Summary

• Mondelez International's net revenues for the first quarter of 2026 increased by 8.2% to $10.08 billion compared to the same period in 2025.
• Organic Net Revenue, a non-GAAP measure, grew by 3.0% to $9.58 billion, driven by higher net pricing.
• Diluted Earnings Per Share (EPS) attributable to Mondelz International rose by 41.9% to $0.44.
• Adjusted EPS decreased by 9.5% to $0.67, and on a constant currency basis, it decreased by 14.9% to $0.63.
• The company experienced higher operating costs, including raw materials, labor, and energy, though cocoa prices were lower than the prior year but remained elevated.
• Geopolitical events in the Middle East and the war in Ukraine continue to be monitored for potential impacts.

Sentiment

Score: 6

Explanation: StockSavvy.ai views this as a mixed-to-positive report. While top-line growth and EPS were strong, driven by pricing and favorable currency, the decline in Adjusted EPS and operational challenges like higher costs and unfavorable volume/mix indicate underlying pressures.

Positives

• Net revenues increased by 8.2% to $10.08 billion.
• Organic Net Revenue grew by 3.0% to $9.58 billion, driven by higher net pricing across all regions.
• Diluted EPS increased by 41.9% to $0.44.
• Favorable currency translation rate changes contributed $499 million to net revenues.
• Operating income increased by 18.8% to $808 million.
• Operating income margin improved from 7.3% to 8.0%.

Negatives

• Adjusted EPS decreased by 9.5% to $0.67, and by 14.9% on a constant currency basis.
• Unfavorable volume/mix was experienced in Europe, Latin America, and North America due to pricing elasticity and category softness.
• Higher input costs, including raw materials, packaging, edible oils, nuts, energy, and dairy, negatively impacted results.
• Selling, general, and administrative expenses increased by $205 million, partly due to ERP System Implementation costs.
• Restructuring charges increased to $47 million.
• The company's operations in Ukraine and Russia continue to be monitored due to geopolitical risks.

Risks

• Fluctuating consumer demand, inflationary pressures, supply constraints, trade and regulatory uncertainty, and exchange rate volatility.
• Higher operating costs, including raw material, labor, and energy costs.
• Cocoa prices are expected to remain elevated compared to historical levels.
• Pricing actions have adversely impacted consumer demand in the United States and Europe.
• Potential impact of tariffs and trade restrictions from governments.
• Geopolitical uncertainty, including developments in Ukraine and the Middle East, and related sanctions.
• The war in Ukraine could continue to impact business operations, financial performance, and results of operations.
• Developments in the Middle East have created logistical pressures and increased shipping costs.
• The supply of cocoa is exposed to factors like climate change, weather, and regulations, which could impact profitability.
• The company may not be able to increase prices sufficiently to cover incremental cocoa costs.
• Hedging strategies may not fully protect against increases in specific raw material costs.
• Potential for impairment of indefinite-life intangible assets if performance declines.

Future Outlook

The company anticipates ongoing volatility in the global economic environment. While the overall outlook for future snacks revenue growth remains strong, the company expects continued volatility. They plan to proactively manage the business in response to evolving global economic conditions and business risks, while prioritizing employees and customers. Capital expenditures for 2026 are expected to be up to $1.4 billion, funded by cash from operations.

Management Comments

• Our strategy is to drive long-term growth by focusing on four strategic priorities: accelerating consumer-centric growth, driving operational excellence, creating a winning growth culture and scaling sustainable snacking.
• We believe the successful implementation of our strategic priorities and leveraging of our attractive global footprint, strong core of iconic global and local brands, marketing, sales, distribution and cost excellence capabilities, and top talent with a growth mindset, will drive consistent top- and bottom-line growth, enabling us to continue to create long-term value for our shareholders.
• We continue to monitor existing and potential future tax reform around the world.
• We believe that cash from operations, our revolving credit facilities, short-term borrowings and long-term debt financing will continue to provide sufficient liquidity for our working capital needs, planned capital expenditures and future payments of our contractual, tax and benefit plan obligations and payments for acquisitions, share repurchases and quarterly dividends.

Industry Context

StockSavvy.ai notes that Mondelez International's performance in Q1 2026 reflects broader industry trends of pricing power amidst inflationary pressures, offset by consumer sensitivity to price increases impacting volumes. The company's focus on strategic priorities like consumer-centric growth and operational excellence is crucial in navigating a volatile global economic landscape.

Legal Proceedings

• The company is involved in various pending or threatened legal proceedings, claims, disputes, regulatory matters, and governmental inquiries. While the company believes the ultimate outcome will not materially harm its financial position, unfavorable rulings could involve substantial fines, penalties, or injunctions.
• A class action lawsuit (Harry Ploss et al. v. Kraft Foods Group, Inc. and Mondelz Global LLC) is ongoing, stemming from allegations similar to those made by the CFTC regarding wheat futures contracts. The company expects to bear any monetary penalties or payments related to this class action.

Stakeholder Impact

• Shareholders: The increase in net revenue and diluted EPS is positive for shareholders. However, the decrease in Adjusted EPS and ongoing operational challenges may temper enthusiasm.
• Employees: The company is managing higher operating costs and investing in an ERP System Implementation, which could impact workforce priorities. Restructuring actions may also affect employees.
• Customers: Pricing actions taken to offset higher input costs may lead to reduced consumer demand due to pricing elasticity.
• Suppliers: The company is working with suppliers to optimize payment terms and facilitates voluntary supply chain financing programs.

Next Steps

• Continue to monitor global economic environment, geopolitical events, and their impact on operations.
• Proactively manage business in response to evolving economic conditions and business risks.
• Continue to mitigate impacts to supply chain, operations, technology, and assets.
• Evaluate the impact of potential future tax reforms.
• Continue to fund capital expenditures with cash from operations.

Key Dates

Recommendation

The company shows top-line growth and strong EPS, driven by pricing power and favorable currency. However, the decline in Adjusted EPS, increased costs, and negative volume/mix trends suggest operational headwinds. While the company is navigating a challenging macroeconomic environment, the mixed operational performance warrants a 'hold' recommendation until clearer signs of sustained operational improvement emerge.

Keywords

Mondelez International, Q1 2026 Earnings, Net Revenue, Organic Net Revenue, Diluted EPS, Adjusted EPS, Snacking, Financial Results, SEC Filing, Form 10-Q